Make available test limits FTS taxation on software-related support and training receipts under the India-UK DTAA.

Receipts from software licence-related implementation, enhancement, maintenance, consultancy and training services were treated as non-taxable Fees for Technical Services under the India-UK DTAA because the Revenue did not prove that technical knowledge, experience or know-how was made available for independent use. Ancillary support linked to software utilisation did not, by itself, satisfy the make available test. Reimbursed travelling and lodging expenses were also not sustained as FTS on the facts recorded, especially where the matter had already been remanded for verification. The impugned additions on both heads were therefore not sustained.

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Issues: (i) Whether receipts from software licence-related services, including implementation, enhancement, maintenance, consultancy, training and allied activities, were taxable as Fees for Technical Services under the India-United Kingdom DTAA on the basis that such services satisfied the "make available" requirement. (ii) Whether the reimbursement amount towards travelling and lodging expenses could be taxed as FTS despite the matter having been remanded for verification.

Issue (i): Whether receipts from software licence-related services, including implementation, enhancement, maintenance, consultancy, training and allied activities, were taxable as Fees for Technical Services under the India-United Kingdom DTAA on the basis that such services satisfied the "make available" requirement.

Analysis: The dispute turned on whether the services were independent taxable technical services or were inextricably linked to the use and installation of the software itself. The Court applied the governing principle that where the underlying software receipt is not taxable as royalty or otherwise, training and related support activities connected with utilisation of that software do not, by themselves, become taxable as FTS merely because the agreement uses the expression "make available". The Revenue had to establish that the technical knowledge, experience or know-how was in fact made available so that the recipient could independently use it, and that burden was not discharged.

Conclusion: The issue was decided in favour of the assessee and against the Revenue; the software-related service receipts were not taxable as FTS.

Issue (ii): Whether the reimbursement amount towards travelling and lodging expenses could be taxed as FTS despite the matter having been remanded for verification.

Analysis: The reimbursement component was treated separately from the service receipts. The Court accepted that the amount represented reimbursed travelling and lodging expenditure and noted that the matter had already been remanded for verification. In that backdrop, the addition could not be sustained as FTS on the facts recorded.

Conclusion: The issue was decided in favour of the assessee and against the Revenue; the reimbursement addition was deleted.

Final Conclusion: The appeal failed, no substantial question of law survived, and the assessment additions made on the impugned heads were not sustained.

Ratio Decidendi: Software-related support and training receipts that are merely ancillary to the use of non-taxable software do not become FTS unless the Revenue proves that technical knowledge, experience or know-how was made available to the recipient for independent use.

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